Q3 2024 LGI Homes Inc Earnings Call Transcript
Key Points
- LGI Homes Inc (LGIH) reported a strong third quarter with revenue of $652 million, marking a 5.6% increase compared to the previous year.
- The company achieved a record high average sales price (ASP) of over $371,000, contributing to their financial success.
- LGI Homes Inc (LGIH) expanded its community count by 30% year-over-year, ending the quarter with 138 communities, the largest annual increase in its history.
- The company maintained a strong adjusted gross margin of 27.2%, reflecting their focus on profitability and operational excellence.
- LGI Homes Inc (LGIH) was recognized by Newsweek as one of the world's most trustworthy companies for the second consecutive year, highlighting their commitment to integrity and customer service.
- The company experienced a moderation in sales activity in October, attributed to affordability challenges and higher interest rates.
- LGI Homes Inc (LGIH) reported a cancellation rate of 26.2% for the third quarter, indicating some instability in order retention.
- The company's selling expenses increased to 8.5% of revenue, up from 8.1% the previous year, due to higher advertising spend and personnel costs.
- Despite strong revenue growth, the pretax net income margin decreased slightly to 14.1% from 14.5% in the same period last year.
- Affordability challenges have priced out households with incomes between $60,000 and $100,000, limiting the potential customer base for entry-level homes.
Welcome to LGI Homes third-quarter 2024 conference call. Today's call is being recorded, and a replay will be available on the company's website at www.lgihomes.com. After management's prepared remarks, there will be an opportunity to ask questions.
At this time, I'll turn the call over to Joshua Fattor, Executive Vice President of Investor Relations and Capital Markets. You may begin.
Thanks, Latania, and good afternoon.
Before we begin, I'll remind listeners that this call contains forward-looking statements, including management's views on the company's business strategy, outlook, plans, objectives, and guidance for future periods. Such statements reflect management's current expectations, and involve assumptions and estimates that are subject to risks and uncertainties that could cause those expectations to prove to be incorrect. You should review our filings with the SEC for a
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